Senator O’BRIEN (12:28 PM)
—In relation to the Water Bill 2007 and the Water (Consequential Amendments) Bill 2007, the evidence is very clear that the health of our rivers is deteriorating. This is particular so for the rivers of the Murray-Darling Basin. There is also an acceptance that the water in the basin has been overallocated, and most of us accept that climate change is real and that we will need to get used to having even less water in our rivers. That is why federal Labor has consistently supported greater national leadership in water policy and water reform. It is for that reason that Labor supports the Water Bill 2007 and the Water (Consequential Amendments) Bill 2007. The bills are not perfect—even the Prime Minister recognises that—but they are a step in the right direction. Labor believes that, by establishing a sustainable cap on water diversions from the basin, the bills are a step towards fixing some of the Murray-Darling Basin’s long-term problems. They give the Commonwealth greater control over water planning for the basin and should help deliver greater water security. The bills put in place a planning process to manage the basin and restore its health. It is only by doing that that we will secure the ongoing prosperity of the communities that rely on the system.

The Water Bill will help set up some of the structures to fix some of the basin’s long-term problems. Under the bill, the Commonwealth will establish a new expert based Murray-Darling Basin Authority to develop and oversee implementation of a basin plan for water management. However, Labor is concerned that having both a Murray-Darling Basin Authority and the Murray-Darling Basin Commission will mean that the basin’s management and strategy will be confused. The layers of bureaucracy, coupled with a lack of information about actual program funding for the National Plan for Water Security, strongly suggests that a lot of the planning of this bill is being done on the run. Ending up with two Murray-Darling Basin agencies—the commission and the authority—will confuse decision making, and this should be sorted out. In broad terms, the plan will include a new sustainable cap on extractions of surface and groundwater in the basin, a salinity and water quality plan, an environmental watering plan and trading rules. But we await the details on all of this. The bill sets out processes for accrediting the catchment-level water plans prepared by basin states under their existing legislation to ensure the outcomes of the basin plan are achieved.

Labor are concerned that the separation of salinity from other environmental concerns may complicate management of the basin on a catchment basis. We must improve water security and planning while at the same time help water users adapt to having less water and to climate change. Of course it is possible that the long-term average sustainable water diversion limit for the water resource plan, otherwise known as the cap, will have to be reduced. That means there will be compulsory water entitlement reductions under clause 77 of the bill. But it is an open question as to how this will, in reality, be different from compulsory acquisition. Under clause 77 of the bill, when that cap is reduced it appears that the water entitlement holder may receive compensation for that reduction. Clause 77 sets out the way in which the liability for that compensation will be distributed. I note that clause 255 of the legislation does not authorise the compulsory acquisition of water entitlements. However, clause 77 sets up a mechanism for paying out irrigators for a legislated reduction in their water entitlement. I do not think this is a word game—and we will see how this works in practice, of course—but it is certainly arguable that forced acquisition of entitlements when the cap is reduced is really a compulsory process for acquiring water. Of course, compensation under clause 77 offers much less compensation than compulsory acquisition does, so it will be interesting to see how the government handles that one. It is a good step forward that the bill establishes a Commonwealth environmental water holder to manage environmental outcomes from the new water holdings purchased by the Commonwealth under the new funding program of the national plan—and, through the Bureau of Meteorology, the level and quality of information on water will improve. This will help our understanding of and ability to manage water resources on a sustainable basis.

Labor are concerned that, because of the haste to develop and pass legislation in an election year, the Water Bill 2007 represents a second-best solution on national water reform. We are concerned that more bureaucracy is being created and that the new Murray-Darling Basin Authority will have a very confusing mandate and not much authority. The overlapping and unclear decision-making structures are a symptom of a rushed piece of legislation in an election year. Labor deplore the government’s failure to consult in good faith with state governments and other stakeholders over the final version of the bill and the related intergovernmental agreement. We understand that the legislation we have before us today is very different to the versions circulated over the last few months. A key element of the national plan remains for basin states and the ACT to sign an intergovernmental agreement committing them to refer powers for an eventual basin-wide management structure and work cooperatively to implement all aspects of the Commonwealth’s Water Bill. The development of the intergovernmental agreement is critical to the effectiveness of the basin plan and future water management in the basin. We are very concerned that the intergovernmental agreement was not provided to the Senate committee inquiry into this bill, and has not been given to state governments or any stakeholders in the basin. The yet-to-be-released intergovernmental agreement will govern federal and state relations, guide investment and ensure water plans function properly—although the department conceded that the document would not be legally enforceable.

It is important that the government publicly release and circulate the intergovernmental agreement, set out clearly what the risk-sharing arrangements with states will be and explain why the states should carry more risk than was agreed to with the Prime Minister in early July, and explain why the water needs for towns and cities in the basin and the other downstream consequences of water planning are not dealt with in the bill and whether they will be dealt with in the intergovernmental agreement. Labor are worried that the Prime Minister appeared to change the conditions for the IGA at the very last moment. We are concerned that, as a result, states may not sign up. As a commentator said on The Law Report on Tuesday night, we may end up with a ‘constitutional Afghanistan’ when this is all over. We truly hope not, but by rushing the bill and playing political games with the IGA that is a risk the government is taking. More broadly, Labor believe the water reform process must continue so that we can properly fix the overallocation of water licences in the Murray-Darling Basin. We have to ensure harmony between the environment and consumptive use, and help address the impact of drought and climate change on water supply.

I just want to step back for a minute from the details of the bill and put this debate in a broader context. Water is one of our most valuable natural resources, and the sustainable management of water is one of the most important challenges facing the nation today. It is a challenge that goes directly to the health and sustainability of our planet, to our everyday lives and to our economy. In many ways water is the lifeblood of the nation. It is universally accepted that where there is water there is life, and when the water dries up life itself often perishes. Indeed, when NASA looks for signs of life on the planets in our universe, they look for water.

One of the signs of a prosperous, growing, healthy community, society and economy is one where there is a secure and stable supply of water. But in recent years, with one of the longest droughts on record and the current and future impact of climate change, water supply and storage has been at great risk. We cannot allow sudden bursts of rain and floods to lull ourselves into a false sense of security. Make no mistake, the great global challenge of climate change is inexorably linked with the water crisis now affecting rural areas and our cities, suburbs and towns.

The greatest threat to the security of our water supplies comes from our changing climate: continuing drought, changing rainfall patterns, declining overall rainfall and reduced supplies in our catchments. That is why it is so disappointing that the good work done at COAG in the early nineties was not followed through by the Howard government. Valuable time to help Australia adapt has been lost. Diminished water supplies and restricted use of water impact on almost every aspect of our nation—on our farms and in our factories, in our homes and schools, on our environment and our community. In short, water is one of our most precious resources, but it is a resource that has become threatened—threatened now and increasingly so in the future—demanding new and urgent action. If we ignore this threat and fail to rise to this challenge, we will do so at our peril and risk our environment, our communities and our economy.

You cannot plan for the future if you do not have a plan for climate change—and you cannot begin to address our national water crisis without understanding the powerful driving force of climate change. Surprisingly, some in the government do not believe that climate change is anything to worry about. They dispute the science. They downplay the effects of the changing climate. Looking ahead, we are advised by the CSIRO that we face hotter and drier summers, the devastation of the Great Barrier Reef, the loss of our snowfields, increasing droughts, less water for our cities and more bushfires. Australia needs to be ready for these changes, but the government’s inaction has left Australia unprepared for the dramatic impacts of climate change.

The bill before the Senate is a step in the right direction, and in some ways will help Australia to better plan and manage our water resources. It will help Australia adapt. But why has it taken 13 years for this legislation to come forward? The COAG meeting of February 1994 laid out a framework for national water reform. It is very disappointing that it has taken an election year to get the Prime Minister’s attention on this matter. Dealing with the water crisis is integral to dealing with the climate crisis. Taking action based on the science and showing leadership is what is needed, not ignoring the state of the Murray for 13 years. And blaming the states is simply not good enough. The blame game is a game for losers. Leadership is required, but it has been in short supply on water and indeed on climate change for many years.

Across Australia, our families, our farmers and our businesses are recognising the effects of climate change on their water supplies. Water restrictions are no longer uncommon; farmers and businesses are starting to realise the need to be more energy and water efficient—indeed, some have taken the challenge up well before this government. Neither water nor climate change are simply environmental challenges.

As with climate change, the water crisis is a fundamental economic challenge. The history of our economic development has been closely linked to water, as most of our cities and towns are located where water could be sourced for personal and economic use. Water is critical to the industries that generate more than half of Australia’s GDP and over 80 per cent of our exports, including our farms and agricultural industries, the mining industry and the manufacturing industry. But the environmental and economic challenges posed by water shortages are not isolated; they are linked. For example, the Murray-Darling Basin provides a good example as to how the shortages of water can have a significant economic impact, as the production of rice, cotton, wheat and cattle account for around 40 per cent of the nation’s agricultural output.

While it is right for the government to focus efforts on finding a solution for the Murray-Darling Basin, we cannot ignore the other 18 million Australians who live outside the basin. The water crisis affects our cities, towns and suburbs just as much. Coming from a part of the country that is well endowed with water, I can sympathise with those that come from more challenged parts of the country, such as the state of South Australia. There are the farmers and agricultural producers who rely on water for their livelihoods; businesses who use a lot of water like restaurants and laundromats; the mining and manufacturing sectors, who use water at various stages of production; our hospitals, universities and research institutions, which are also large water users; families who want to water their garden, wash their car and fill up their swimming pools—it is about lifestyle; and our kids who want to swim in local pools and play on the local sporting fields and are seeing them drying out and their sport cancelled on weekends in some parts of the country.

Our national government can no longer afford to ignore this challenge facing our regional towns and major cities. Labor believes that there is an important role for the federal government in transforming the way we secure our future water supplies and use our water more efficiently. That applies to water use in the Murray-Darling Basin and right across Australia. Labor does not believe that finding solutions to the water crisis should be simply left to the states or local government to tackle alone; it requires all levels of government to work together. Labor supports this bill as a step forward, and we are putting down a very clear marker that more work needs to be done.

(a)
notes that modern national water reform began with the Murray-Darling Basin Act 1993 and the historic Council of Australian Governments agreement on water reform in 1994 led by the Keating Labor government;

(b)
regrets that, despite clear warning signals about the health of the river system, it has taken 13 more years to see the next stage of Commonwealth action to address the problems of the Murray-Darling Basin;

(c)
is concerned that the legislation before the Senate represents a second best solution on national water reform;

(d)
deplores the Government’s failure to consult in good faith with state governments and other stakeholders over the Water Bill 2007 and the related intergovernmental agreement;

(e)
believes the water reform process must continue so we properly fix the over-allocation of water licences in the Murray-Darling Basin, ensure harmony between the environment and consumptive use, and help address the impact of drought and climate change on water supply;

(f)
notes that:

(i)

climate change will have a significant impact on water supply generally and the health of the Murray-Darling Basin in particular,

(a)
a cooperative and constructive approach with state governments to assist water reform and investment in urban and rural water infrastructure,

(b)
full implementation of the national water initiative principles agreed to in 2004,

(c)
fixing of the over-allocation of water licences once and for all, and the establishment of coherent, streamlined rules which ensure the problem of over-allocation never recurs,

(d)
recognition that economic instruments, including water trading, are necessary to address the fact that water has been over-allocated, undervalued and misdirected,

(e)
proper consultation with key stakeholders in the Murray-Darling Basin, including all water users, farmers, water scientists, environment groups and the broader community to ensure the adoption and consistent use of efficient agricultural practices,

(f)
returning sufficient water to the rivers in the Murray-Darling Basin to ensure the long-term health of all rivers, wetlands and all connected groundwater systems in the Basin and, as a result, ensure the health of the communities and businesses that rely on the health of those rivers, and

(g)
measures to ensure industrial and urban water users adapt to maximise water efficiency”.

(ii)

the Commonwealth Scientific and Industrial Research Organisation will provide an important report in late 2007 on the hydrology of the Basin and what the sustainable extraction levels are for the Basin, and

(a)
a cooperative and constructive approach with state governments to assist water reform and investment in urban and rural water infrastructure,

(b)
full implementation of the national water initiative principles agreed to in 2004,

(c)
fixing of the over-allocation of water licences once and for all, and the establishment of coherent, streamlined rules which ensure the problem of over-allocation never recurs,

(d)
recognition that economic instruments, including water trading, are necessary to address the fact that water has been over-allocated, undervalued and misdirected,

(e)
proper consultation with key stakeholders in the Murray-Darling Basin, including all water users, farmers, water scientists, environment groups and the broader community to ensure the adoption and consistent use of efficient agricultural practices,

(f)
returning sufficient water to the rivers in the Murray-Darling Basin to ensure the long-term health of all rivers, wetlands and all connected groundwater systems in the Basin and, as a result, ensure the health of the communities and businesses that rely on the health of those rivers, and

(g)
measures to ensure industrial and urban water users adapt to maximise water efficiency”.

(iii)

the following is needed for national water reform:

(a)
a cooperative and constructive approach with state governments to assist water reform and investment in urban and rural water infrastructure,

(b)
full implementation of the national water initiative principles agreed to in 2004,

(c)
fixing of the over-allocation of water licences once and for all, and the establishment of coherent, streamlined rules which ensure the problem of over-allocation never recurs,

(d)
recognition that economic instruments, including water trading, are necessary to address the fact that water has been over-allocated, undervalued and misdirected,

(e)
proper consultation with key stakeholders in the Murray-Darling Basin, including all water users, farmers, water scientists, environment groups and the broader community to ensure the adoption and consistent use of efficient agricultural practices,

(f)
returning sufficient water to the rivers in the Murray-Darling Basin to ensure the long-term health of all rivers, wetlands and all connected groundwater systems in the Basin and, as a result, ensure the health of the communities and businesses that rely on the health of those rivers, and

(g)
measures to ensure industrial and urban water users adapt to maximise water efficiency”.